Major changes occurring in the world are redefining the metrics of excellence for higher education.

Clara Lovett, president emerita of Northern Arizona University, has recently published a very insightful Commentary in the Chronicle of Higher Education. The Commentary focuses on recent globalization experiences of American business schools, both successes and limitations. The lessons she draws from these experiences are then extended to American higher education more generally.

Lovett begins her story with the 1990's, when "The comparative advantage of American business schools as sources of well-prepared graduates turned into something resembling a global monopoly...". At that time, American schools ramped up international recruiting to their home campuses, drawing students primarily from "elite, Westernized, Anglophone families", students who had academic backgrounds that matched well with those of American students and the resources to pay high American tuitions. Soon, responding to the international demand for American degrees, American business schools began to branch out around the world in the most promising markets.

Although successful branches were opened in many world sites, difficulties began to appear, some arising on the home front. It was, of course, impossible to replicate home-campus conditions in the new branches, and many faculty felt very uncomfortable about the resulting programs. Accrediting constraints added another level difficulty. Externally, international political events often made overseas operations more difficult.

Lovett's key point, however, is that something much more fundamental was at play:

In retrospect, however, it is clear that demography and culture, not politics, placed limits on the ability of American business schools to clone themselves successfully abroad, even when conditions were favorable and suitable local partners could be found.

Even with the branch campuses in place, the children of the elite were still going to the US for their schooling. The new offshore campuses were attracting primarily students from families in an emerging middle class - students for whom study in America would be a major financial burden. The offshore campuses also attracted young women for whom study abroad was considered to be culturally inappropriate. This offshore group belonged to a very different demographic that was less well prepared than the group going to America in terms of traditional academic credentials, mastery of English, comfort with Western norms. Of course, the American model of elite higher education, with its blending of research and teaching, is the most expensive model of higher ed ever invented. Pricing offshore programs at the high levels demanded by this model put these programs out of reach of most middle and lower income students. Thus the realistically defined potential student body turned out to be less than predicted.

More damaging to the model was the unwelcome realization that not all of the world works just like America. Students, although they were hungry for access to many of the components of the world-famous American MBA, and the networks to which it provided entry, did not find it met all of their more actual, contextual needs. Thus:

Graduate students in the United Arab Emirates, for instance, noted that to function in their region, they needed to apply principles of Islamic finance even while learning those of Western finance.

US faculty are, by and large, not in a position to speak knowledgeably about many of the problems of actually doing business in other countries and other cultures. Consequently,the door was left open for foreign institutions to "borrow" what they could from American higher ed, and then add country-and culture-specific material and pedagogies to provide a more powerful local product. Thus, there is a proliferation of "other models" being developed, some of which already are being exported to countries with similar cultural conditions.

Lovett finds that higher education leaders around the globe are quick to acknowledge the core strengths of the American approach, including peer evaluation and academic freedom. Nevertheless, those leaders see the key challenge of the century to be making higher education accessible to an ever increasing number of students, most of whom will be in countries where economic, social, and political conditions provide constraints that make the American model of limited applicability.

As a consequence, according to Lovett, in order for American higher ed to remain a major player on the international scene:

it means joining colleagues across the globe to develop alternatives to the academic models developed in Western Europe and the United States in the past couple of centuries.

In the light of the resistance to change that so characterizes American higher education, this will be a tough prescription to fill! However, since the model is already breaking down in the United States, we may have our own internal impetus to move in the direction suggested by Lovett (see The business model for higher education I and II).

As mass consumption gives way to the wants of individuals, a historic transition in capitalism is unfolding.

So begins an interesting articlein a recent McKinsey Quarterly written by Shoshana Zuboff. Zuboff's premise is straightforward:

Every century or so, fundamental changes in the nature of consumption create new demand patterns that existing enterprises can’t meet. When a majority of people want things that remain priced at a premium under the old institutional regime—a condition I call the “premium puzzle”—the ground becomes extremely fertile for wholly new classes of competitors that can fulfill the new demands at an affordable price.

She argues that we are at such a point now. Increases in educational and living standards, complexity of society, and longevity have lead to parallel increases in desire for individual self determination, and new interactive technologies provide a means to respond to that desire. According to Zuboff, this combination will lead to a mutation in capitalism that demands new business models with new purposes, new methods, and new outcomes:

This shift not only changes the basis of competition for companies but also blurs—and even removes—the boundaries between entire industries, along with those that have existed between producers and consumers....

Winning mutations—those that create value by offering consumers individualized goods and services at a radically reduced cost—express a convergence of technological capabilities and the values associated with individual self-determination.

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